British Columbia (B.C.) Premier Christy Clark has called on the Prime Minister to impose a ban on thermal coal exports from B.C. ports.
Clark is framing the move as a climate-friendly initiative to help rid the world of its most carbon-intensive fossil fuel, but it’s really a wedge in the re-emerging trade dispute between Canada and the United States (U.S.) over softwood lumber, the bulk of which is sourced from B.C.
And just in case Ottawa isn’t inclined to impose a ban, Clark has followed up with her own proposal to levy a $70 per tonne carbon tax on thermal coal exports from B.C., a tax that would make thermal coal exported from B.C. unaffordable on the global market.
In 2016, 6.2 million tonnes of U.S. thermal coal moved through the Port of Vancouver, making it a vital outlet for the struggling U.S. west coast coal industry.
According to the B.C. Liberal Party, the proposed carbon tax represents “the greenhouse gas emissions caused by the extraction, processing, transportation and combustion of thermal coal through a B.C. terminal.”
In recent media interviews, U.S. President Donald Trump has confessed to being surprised by the complexities of governance in such issues as international affairs and health care. He may soon have to add international trade to that list, as his administration’s announcement of a tariff on Canadian softwood lumber landed squarely in the middle of a hotly contested provincial election in B.C. It presented Premier Clark, trailing the New Democrats in the polls, with a perfect opportunity to stand strong for her province in the face of pressure from the U.S.
Clark’s call for a tax on thermal coal exports even earned her rare praise from B.C. Green Party Leader Andrew Weaver and several environmental groups.
The Prime Minister has not responded to the Premier’s letter beyond a statement from his press secretary to the effect that he takes all such requests seriously.
However, Clark’s initial call for an export ban, and subsequent proposal for a hefty carbon tax, have clearly been heard.
Westshore Terminals in Vancouver, the largest coal export terminal in North America, would be hard hit. Its General Manager and its Chairman jointly signed their own appeal to the Prime Minister urging that he reject the export ban. Westshore’s stock fell 3% following the release of Clark’s letter to the Prime Minister, and another 0.37% after her promise of a carbon tax.
The Coal Association of Canada issued a statement noting that the Premier’s proposed carbon tax would hit Alberta thermal coal exported from B.C. just as hard as it would U.S. coal.
B.C. also mines and exports coal, but the bulk of it is metallurgical coal not subject to the proposed ban or carbon tax.
Perhaps the biggest effect is being felt where it was intended — among U.S. west coast coal miners. Cloud Peak Energy, which ships through B.C., saw its stock price fall 14% following the release of Clark’s letter to the Prime Minister.
Trump has made the revival of the thermal coal industry a priority for his administration, and shutting the Port of Vancouver to thermal coal exports would deal that industry a considerable blow. According to an August 1, 2016 Wall Street Journal report, of seven coal export terminals proposed for the U.S. west coast over the past five years, not one has been opened.